This year has been somewhat choppy for fundraising globally and many would have you believe that London lags behind other players on the global stage and is not as attractive a place to do business and seek investment as it once was.
Recent news now calls this claim into question.
A number of leading banks including JP Morgan, CIBC and HSBC Innovation Banking are increasing their UK operations to take advantage of the UK’s fast growing innovation economy (including the tech, life sciences and climate tech sectors). The UK has of course faced its own challenges in recent years but the expansion by these banks into the UK shows that the collapse of SVB has led other major bankers into this exciting part of the market.
The news also shows that that London remains one of the most attractive jurisdictions in the world for financial institutions, and as a natural corollary to that, to growth sector entities that are looking to raise funds and expand internationally. When looking at expanding operations and raising funds, there is no shortage of potential markets ranging from New York to Paris and from Tokyo to Frankfurt, but there are a number of key factors which mean that financial institutions, and the businesses that wish to utilise the facilities they offer, have continued to, and will continue to, look favourably upon London.
What is London's 'charm', you ask? As well as having a well-established and respected legal system, there are also key logistical benefits that London can offer that other jurisdictions just can’t match. Its location between America and Asia means that businesses can transact with parties across the globe within business hours in the UK and that, coupled with the fact that English is the international language of business, provides London with a USP that other locations cannot compete with.
Furthermore, the UK is home to some of the world’s oldest and most prestigious universities which are attended by students from across the globe. This means that the UK offers a very highly skilled talent pool for employers to pick from when seeking to expand their businesses regardless of their industry. The technology and life sciences sectors are a particular strength of the London market and they have remained resilient and largely immune to challenges that have significantly impacted other sectors.
It is encouraging to see such well-recognised banks expanding in the UK – the Government has been taking steps to review and adapt regulatory rules with the intention that the UK business regime provides the highest levels of certainty and efficiency for new (and international) entrants, which certainly appears to be paying off.
Whilst there is no doubt that Brexit and a weaker pound have somewhat impacted appetite for expansion into and fundraising in the UK, the UK’s high-growth economy remains the third largest in the world being worth an estimated $1 trillion, which shows that the UK and London remain extremely attractive locations for these sectors and beyond.
There will always be some degree of negativity in the market. But when there are positive news stories and good signs for the City, let's recognise them. Highly reputable financial institutions stepping up operations here is another add to London’s tally from both a micro and a macro perspective.
Daniel Rosenberg, Partner, and Ashwin Pillay, Senior Associate, in the corporate team of law firm Charles Russell Speechlys
